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(B)(N) NOV National Oilwell Varco Incorporated & Company

May 17, 2015
Gone Fishing

Gone Fishing

Drama. A lot of investors (or maybe just some) seem to think that it’s clever to “sell in May and go away” suggesting that they have some profits this year already (although in this sector they might just be limiting their losses; please see below) and that they might as well lock them in (profits or losses) and take a vacation because nothing is going to happen without them until September – unlike June 2014 of last year which was the beginning of the end of the oil & gas industry as they knew it and that drama is far from over but why should we expect a do-over? (Barron’s, May 11, 2015, Oil Services: ‘Take Profits and Take a Summer Vacation’.)

Well, OK, so take a vacation (please see the illustration on the upper right) – but while they’re selling and not buying, the stock prices are going to go down and we can shop around and see what new stocks of ours they might want to buy from us at a higher price in September.

There are only nine majors in the US onshore drilling and service game but all of them but for two (Schlumberger and Baker-Hughes) are trading below the price of risk and they are in the (N)-class of volatility and investor uncertainty – that means that seven of them are really the bottom fish (including our poster child National Oilwell Varco Incorporated) and only two might be biting.

Moreover, in aggregate, they’re trading at 2013 prices and off more than 30% from their highs in 2014 and some people must be wondering what happened to their $100 billion of “profits” last year and why they didn’t cut bait sooner than today (in May♥); please see Exhibit 1 below for the whole story (and click on it and again to make it larger as required).

Exhibit 1: (B)(N) National Oilwell Varco & Onshore Drilling – Risk Price Chart

Figure1.1: (B)(N) National Oilwell Varco & Onshore Drilling - Risk Price Chart

Figure1.1: (B)(N) National Oilwell Varco & Onshore Drilling – Risk Price Chart

For more information on the Free Market Yield and the terms that we have used above, please see our Posts “(P&I) The Dismal Equation (Ecclesiastes 9:1)” and “(B)(N) S&P 100 Volatility Risk and The Full Moon” and “(B)(N) NASDAQ 100 Volatility and The Stone Bunnies“ and for an introduction to The Barometer “(B)(N) What’s A Girl To Do” or “(P&I) The Swiss Franc Debacle“.

And for more information on real “risk management” in modern times and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“, and our recent Posts “(P&I) The Profit Box” and “(P&I) The Process – In The Beginning“; and we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more applications of these concepts please see our Posts which rely on the Theory of the Firm developed by the author (Goetze 2006) which calibrates The Process to the units of the balance sheet and demonstrates the price of risk as the solution to a Nash Equilibrium between “risk-seeking” and “risk-averse” investors within the demonstrated societal norms of risk aversion and bargaining practice. And for more on The Process, please see our Posts The Food Chain and The Process End-Of-Process.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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